Waters v. Superior Court of Los Angeles County

Decision Date18 December 1962
CourtCalifornia Supreme Court
Parties, 377 P.2d 265 Frank J. WATERS, Petitioner, v. The SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent; HUGHES TOOL COMPANY, Real Party In Interest. L. A. 26934.

Crowley & Rhoden, Arthur J. Crowley, Hollywood, the Philip C. Griffin, Los Angeles, for petitioner.

No appearance for respondent.

Bautzer p Grant and Herbert Schwab, Beverly Hills, for real party in interest.

TOBRINER, Justice.

Applying the liberality of construction which we believe to be appropriate to discovery procedures, we hold here that plaintiff has sufficiently shown 'good cause' to entitle him to an order pursuant to Code of Civil Procedure section 2019, subdivision (a)(3) to take the deposition of an unserved defendant and certain witnesses. On the other hand, for reasons hereinafter stated, we do not believe that plaintiff has presently submitted and adequate showing pursuant to Code of Civil Procedure section 2019, subdivision (a)(4) to take the deposition of the unserved defendant as managing agent of the corporate defendant or as a person for whose immediate benefit the action was being defended.

On December 29, 1961, Frank J. Waters, a member of the bar of this state, filed his complaint against Howard Hughes, Hughes Tool Company, a corporation, Hughes Aircraft Company, a corporation, and Howard Hughes Medical Instute, a corporation, to recover $1,094,250 as fees for professional services. The complaint alleges that plaintiff rendered services during the years 1957, 1958, 1959 and 1960, and that the indebtedness 'was incurred by Howard Hughes, individually, and by each of the remaining defendants.' It also alleges, in substance, that Hughes Tool Company is the alter ego of Hughes, that it is insolvent, and that 'an injustice will result if the corporate veil is not lifted and if defendant Howard Hughes is not held personally liable for the debts and acts of the said corporation herein complained of.'

Served only on Hughes Tool Company on January 23, 1962, the original summons was returned to the court on February 21. As of the date of the orders in question, no alias summons had been issued directed to Howard Hughes or the other corporate defendants, and none of them had appeared in the action. The actions against Hughes Aircraft and Howard Hughes Medical Institute have now been dismissed.

On February 15, 1962, Waters served on Hughes Tool Company a notice that the deposition of Hughes would be taken on February 28. In opposition, Hughes Tool Company on February 19 served Waters with notice of a motion for an order that the deposition of Hughes not be taken on the stated ground 'other defendants in the action' had not been served with summons, 'and no order of court' had been obtained to take the deposition. Waters, then, on February 21, sought and obtained an ex parte order to take the deposition of Hughes without notice to the defendants who had not been served with summons.

Two days later the court on its own motion vacated that ex parte order on the basis that Waters had obtained it by 'knowingly and deliberately' failing to disclose to the court that he had already served the notice to take Hughes' deposition and had been served with a notice of motion for a protective order.

In addition to the above motion for a protective order, Hughes Tool Company noticed another motion for a further protective order on the ground that Hughes is not 'an officer, director or managing agent' of Hughes Tool Company, and is not 'a person for whose immediate benefit' the action is defended within the meaning of Code of Civil Procedure section 2019, subdivision (a)(4).

On February 23, Waters reapplied for an order to take Hughes' deposition pursuant to section 2019, subdivision (a)(3), and, for the first time, applied for a similar order to take the depositions of Robert Maheu, Richard Nixon, Norris Poulson, William Gay, Gregson Cautzer and Lee Murrin. Following his earlier procedure with Hughes, waters served notice of the taking of the depositions of these persons prior to application pursuant to section 2019, subdivision (a)(3) for leave of court to do so. The court denied both motions.

Petitioner seeks a writ of mandate to set aside the order. Since the petition presents several important questions regarding the procedure for the taking of depositions in these circumstances, we believe the writ provides a proper vehicle to review the orders of the trial court. (See Oceanside Union School Dist. v. Superior Court, 58 A.C. 182, 188, fn. 4, 23 Cal.Rptr. 375, 373 P.2d 439.)

We turn to the problems which the case presents: (1) did the trial court abuse its discretion in rejecting plaintiff's attempted showing of good cause under Code of Civil Procedure section 2019, subdivision (a)(3) for an authorization for taking the depositions without giving notice to parties who had not been served with summons; (2) did the court err in holding under Code of Civil Procedure section 2019, subdivision (a)(4) that Howard Hughes was neither a 'managing agent' of Hughes Tool Company nor 'a person for whose immediate benefit' the within action was being defended, in that service upon such depondent was not required?

Two code sections pertain to the first issue. Code of Civil 'Procedure section 2016, subdivision (a) provides that after the service of summons any party may take the deposition of any person at any time, but stipulates that if the notice of the taking of the deposition is served within 20 days after service of the summons the plaintiff must obtain leave of court, upon good cause, to take the deposition. The second section involved, Code of Civil Procedure section 2019 subdivision (a)(3), sets forth that for good cause shown, the court may authorize the taking of a deposition without the giving of notice to parties who have not been served with summons. The section thus limits the scope of Code of Civil Procedure section 2019, subdivision (a)(1) which requires that a party desiring to take the deposition of any person 'shall give notice in writing to every other party to the action.'

We first briefly note the historical background of the sections. As originally proposed, section 2016, subdivision (a), corresponding to Federal Rule 26, 1 differed from the federal rule in that the second sentence of the federal rule, i. e., 'After commencement of the action the deposition may be taken without leave of court, except that leave, granted with or without notice, must be obtained if notice of the taking is served by the plaintiff within 20 days after commencement of the action,' was replaced by Such depositions may be taken in an action at any time after the service of the summons or the appearance of the defendant, and in a special proceeding after a question of fact has arisen therein.' (Emphasis added.) The Committee on Administration of Justice has explained that it sought the proposed change in order to retain the existing California practice, which it considered preferable to the federal practice. (See 31 California State Bar J. 213.) The Legislature, however, included substantially both sentences in section 2016, subdivision (a). Nevertheless, since an action is commenced by filing a complaint (Code Civ.Proc. § 350), the words 'any time after the service of the summons' specify a more restrictive limitation than 'after commencement of the action.' Consequently, the earliest time a party can take a deposition is 'after the service of the summons.' The section additionally constrained the plaintiff by the requirement that he obtain leave of court to serve notice of the taking of the deposition within 20 days after service of the summons on 'the defendant.'

In multi-defendant cases the Committee on Administration of Justice framed a provision for the taking of depositions by leave of court, upon good cause, so that a plaintiff would not be foreclosed from obtaining any depositions until all defendants had been served. The Committee proposed the 1959 amendment to section 2019, subdivision (a)(3) 2 'to empower the court to permit the taking of a deposition when a co-party has not been served with summons.' (33 California State Bar J. 391.) The committee properly feared that sections 2016, subdivision (a) and 2019, subdivision (a)(1) would forbid the taking of a deposition unless all parties to the action had been served with summons and notice of the taking of the deposition and hence added the enabling provision. (Ibid.)

Our first problem is to determine whether the 20-day provision under section 2016, subdivision (a) runs from the date when any one defendant has been served or from the date when all defendants have been served. As we shall point out, we believe service upon any one defendant suffices for the running of the 20-day provision.

While it is true that this construction deprives the unserved defendant of the opportunity to prepare his defense during the 20-day period, we believe that a contrary interpretation would penalize a plaintiff who, because of circumstances beyond his control, could not effect service upon all defendants. Moreover, as we shall explain in discussing section 2019, subdivision (a)(3) the unserved defendant will in any event be protected by notification of the taking of such deposition except in those cases is which the court excuses notice upon a showing of good cause.

We recognize that the fundamental purpose of the 20-day postponement is to afford the defendant time to obtain counsel and inform himself of the nature of the suit. (Westerman v. Grow (S.D.N.Y.1961), 198 F.Supp. 309). If the 20-day waiting period commences to run after service on any one of the named defendants, the unserved defendant suffers a resultant deprivation of that period for preparation. As a practical matter, the 20-day rule also gives the unserved defendant an opportunity, prior to plaintiff, to take the depositions of...

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